Delhi High Court Rules Only Registered Copyright Societies Can License Music, Restricts PPL’s Licensing Activities

The Delhi High Court recently delivered a significant judgment in Azure Hospitality Pvt. Ltd. v. Phonographic Performance Ltd., addressing the contentious issue of who is authorized to license copyrighted music works in India. The court examined whether copyright assignees like Phonographic Performance Limited (PPL) can license sound recordings directly or must do so through registered copyright societies.

PPL, holding copyrights via assignment deeds from original producers, had sued Azure Hospitality Pvt. Ltd. for publicly playing music from PPL’s catalogue without a licence. PPL contended that as a copyright owner under Sections 18(2) and 30 of the Copyright Act, it was entitled to license these works directly. The Single Judge initially agreed, granting an interim injunction against Azure. However, Azure appealed, challenging PPL’s right to license without being a registered copyright society.

The appellate court’s primary question was whether PPL, as an assignee under Section 18(2), could engage in the business of licensing under Section 30 without registration as a copyright society, as mandated by Section 33(1) of the Copyright Act. Section 30 permits copyright owners to license their works, but Section 33 restricts the business of licensing to registered copyright societies or their members.

PPL argued that its ownership rights included the ability to grant licences independently. It relied on the proviso to Section 33(1), which allows copyright owners, in their individual capacity, to license their own works even if they are members of a copyright society. PPL claimed this exempted it from the registration requirement.

Azure countered that PPL was not merely licensing its own works occasionally but was engaged in the business of licensing, which Section 33(1) expressly regulates. Azure warned that allowing PPL’s interpretation would undermine the statutory licensing framework, including transparency and tariff-setting mechanisms introduced by the 2012 amendments. Azure also cited the 227th Parliamentary Standing Committee Report, which criticized the lack of oversight and potential abuse by entities like PPL.

The Delhi High Court sided with Azure’s interpretation. It held that Section 33(1) clearly prohibits carrying on the business of licensing without registration as a copyright society. The proviso to Section 33(1) does not override this restriction; it merely preserves a member’s limited right to license their own works individually, consistent with society obligations.

Crucially, the court found that PPL was engaged in the business of issuing licences, bringing it within the scope of Section 33(1). Since PPL was neither a registered copyright society nor a member of one—its re-registration application was rejected after the 2012 amendments—it could not legally license the works.

The court also rejected prior Bombay High Court rulings in Novex v. Lemon Tree and Novex v. Trade Wings, which had permitted copyright owners to license works independently despite Section 33. The Delhi High Court emphasized that these decisions overlooked the phrase “in respect of any other rights conferred by this Act” in Section 33(1), which encompasses licensing rights under Section 30. Ignoring this would render Section 33 ineffective.

Despite finding PPL’s licensing business impermissible, the court balanced equities by allowing Azure to continue playing the music, provided it paid licence fees according to the tariff rates set by Recorded Music Performance Limited (RMPL), the only registered copyright society for sound recordings under Section 33(3). This interim arrangement will remain until the final resolution of the suit.

The court further directed both parties to submit quarterly statements detailing usage and payments to the single judge overseeing the case.

This ruling clarifies that only registered copyright societies or their members can conduct the business of licensing copyrighted works commercially. It restricts copyright assignees like PPL from bypassing the statutory licensing framework, reinforcing the regulatory structure established by the 2012 amendments. The decision is poised to reshape music licensing practices in India, promoting transparency and oversight in the sector.

“Section 33(1) imposes a clear restriction on carrying on the business of copyright licensing without registration. The proviso does not override the main section but preserves the limited right of a member of a copyright society to license their own works individually, consistent with society obligations.”

“The interpretation allowing deemed owners under Section 18(2) to license independently would reduce Section 33 to a dead letter, undermining the legislative intent and regulatory framework.”

The court acknowledged that legislative intervention might be necessary for further clarity but emphasized its duty to interpret the law as it currently stands.

This judgment underscores the importance of compliance with the Copyright Act’s licensing provisions and reinforces the role of registered copyright societies in managing collective licensing in India.